What travel and vehicle costs can I claim for as tax deductible expenses?

Vehicles owned by the business are capital items and tax relief is claimed as a capital allowance. Businesses can reclaim the VAT payable on the purchase of a van but not on a car.

You can claim the following costs for vehicles that are owned by the business:

  • vehicle insurance
  • repairs and servicing
  • fuel for business use
  • vehicle licence fees
  • breakdown cover

If you own the vehicle personally, you can’t claim for the above as a business expense.

You can claim the following for business and non-business vehicles when used for business purposes:

  • parking
  • business mileage – claims should be supported by an expense claim noting the reason for the travel and the number of business miles.

You can claim travel costs for:

  • hire charges
  • train, bus, air and taxi fares
  • overnight accommodation when travelling on business
  • food and drink on work journeys outside your normal commute. The more the journey resembles your normal pattern of work, the less likely you are to be able to claim the expenses without potentially incurring a personal benefit-in-kind
  • dinner and breakfast when staying overnight – reasonable costs and alcohol with a meal only.

You cannot claim

  • non-business mileage
  • non-business travel costs or travel costs not exclusively for work e.g. top up of travel card available for personal use.
  • speeding fines, parking tickets, non-payment of rail fares and other penalties
  • travel between home and a permanent place of work. Anywhere that you work at least once a week, on a long-term basis, is classed as a permanent place of work. You can have more than one permanent workplace
  • parking fines, speeding tickets, non-payment of rail fares and other penalties.

You can extend a business trip to do some shopping or sightseeing and still claim for the for the trip. As long as the primary purpose of the trip is business, you can still claim all the business-related costs. Make sure you keep proper records, notes and board minutes or conference materials to document the main reason for the trip and satisfy HMRC.

However, if you go on holiday and decide to do some business whilst there, you can’t claim for the cost of the business activity.

Do you still have questions? Get in touch with our accounts team to find out more about how they can help you.

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